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Is Additional Schooling Worthless? Revising Zero Returns to Compulsory Schooling in Germany

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  • Kamila Cygan-Rehm

Abstract

This study estimates the effect of compulsory schooling on earnings. For identification, I exploit a German reform that extended the duration of secondary schooling in the 1960s. I find that hourly wages increase by 6%-8% per additional year of schooling. This result challenges prior findings for Germany of zero returns to schooling, obtained by using the same survey data and reform. I show that the earlier estimates suffer from unconsidered institutional details. A complementary analysis using social security records confirms significant effects on earnings, but yields no effects on employment and take-up of public transfers.

Suggested Citation

  • Kamila Cygan-Rehm, 2018. "Is Additional Schooling Worthless? Revising Zero Returns to Compulsory Schooling in Germany," CESifo Working Paper Series 7191, CESifo.
  • Handle: RePEc:ces:ceswps:_7191
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    Cited by:

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    3. Daniel Graeber & Daniel D. Schnitzlein, 2019. "The Effect of Maternal Education on Offspring's Mental Health," SOEPpapers on Multidisciplinary Panel Data Research 1028, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Franziska Hampf, 2019. "The Effect of Compulsory Schooling on Skills: Evidence from a Reform in Germany," ifo Working Paper Series 313, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    5. Bömmel, Nadja & Heineck, Guido, 2020. "Revisiting the causal effect of education on political participation and interest," BERG Working Paper Series 167, Bamberg University, Bamberg Economic Research Group.
    6. Bömmel, Nadja & Heineck, Guido, 2020. "Revisiting the Causal Effect of Education on Political Participation and Interest," IZA Discussion Papers 13954, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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